Approved for 50k Owe 40k on an existing balloon due in November. Only paid interest for 10 years. Owe 62k on first mortage done paying in 9.5 years. House is worth 160k. My question is, should I go back to the Credit Union and ask for a higher number than 50K? Once we pay off the balloon, our utilization will improve but not to the 10-15% that it should be at. Thoughts?
Maybe I'm not understanding your question. But how does the utilization improve if you are only swapping out a $40k balloon note for a $50k HELOC?
There are costs to close the loan. You are changing out one 2nd that you have been paying on interest only for ten years for another larger secured loan.
I don't think its a good idea to increase the debt on your house, but that's just my opinion. We have just come through some very difficult years where the debt was greater than the market value for many people on their homes. IMO, it wouldn't be wise to load up your home with more debt. Better to do as you were originally planning to do: change out the balloon note for one that hopefully is not a balloon and hopefully is an amortized loan.
In other news....congrats on only having 9.5 years remaining on your first mortgage! That is an achievement. 
My thoughts were that we are at almost 100% utilization on the current HELOC, It's treated just like any other line of credit, amount of available credit vs how much you are using. I know it's not a big jump but any little bit helps. Or maybe I ask for a 60k and pay off the 40k balloon and have 20k available. That still puts me under 75% debt to value (If my math is correct. Am I wrong?
